Contraction in Number of Retail Outlets to Affect Building Construction Market

A recent article in the Wall Street Journal pointed out that thousands of retails stores are expected to close over the next five years as shoppers not only buy less, but – when they buy – increasingly do so online, for reasons of not only safety but also convenience. Among the many effects of this shift to online shopping is its effect on the building construction market.

The closure of so many stores over the next few years will affect retail construction going forward – with so many empty storefronts, builders and investors will be reluctant to embark upon new projects, as this glut of retail space will offer prospective store owners plenty of options. This decline in retail construction spending will affect demand for a wide range of building materials, from the basics (e.g., structural products, plumbing fixtures and fittings, flooring, lighting, and others) to more retail-specific items such as store fixtures (both cabinets and shelving) and the related casework for displays and cashier stations.

However, there will exist pockets of opportunities for the construction market. Eventually, a number of these retail sites will have occupants, be they retail stores, restaurants (such as quick-serve or pop-up kitchens), or even multifamily housing units. As these retail stores are refurbished and refitted, this will support demand for a wide range of building materials.

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